Most organisations find the need to delegate forced on them by circumstances, especially the pressures on managers to concentrate on environmental issues rather than on internal problems. However, the best practice is to be found in organisations that use delegation positively as an important employee motivator as well as a means of facilitating effective decision-making throughout the organisation.
One of the major questions which has to be faced when considering the practical aspects of delegation is how many subordinates, or team members, can be managed effectively by any one manager or supervisor. This is the classical management issue of the so-called 'span of control', i.e. the number of employees reporting directly to one person.
The term span of control refers to the number of subordinates that an individual manages or controls and for whose work that person is responsible. In tall hierarchical organisations an individual employee may have a wide span of control. In contrast in a teamwork structure the span of control may be narrow or may not exist at all.
Within an organisation, the span of control bears an inverse relationship to the number of layers of hierarchy, i.e. if the span of control is narrow a large number of levels of hierarchy are needed.
In practice spans can vary between one and forty or more subordinates directly supervised, although the most likely range is between three and twenty. Smaller spans tend to be found among managerial, professional and technical groups. Here factors such as cost, the complexity of the work and the need to deal adequately with the problems of people, who may themselves be managers of others, require a closer involvement by superiors in the total operation of their units.
Towards the bottom end of the organisational hierarchy, where employees who have no subordinates themselves are carrying out routine tasks, it is practicable to have much larger spans.
The whole question of spans of control is linked to top management's views about the number of levels they should have in their organisation. If a flat organisation is preferred, then larger spans are an inevitable consequence, especially for middle managers. If a tall structure is preferred, then spans can be smaller. Any final decision has to be a compromise between these opposing consequences.
Other important influences on the size of the spans in an organisation or unit include:
- The levels of ability of management i.e. are they capable of producing results with spans of a certain number.
- The level of knowledge and experience of the subordinates concerned, e.g. well-trained and experienced staff require less supervision than those without training and experience
- The complexity of the work of the unit and the degree of change to which it is subject, i.e. the more complex and more fast changing the work, the more necessary it is to install narrow spans of control
- The costliness of possible mistakes by individuals in the unit
- The degree of hazard or danger associated with the work, e.g. work on oil rigs or in biochemical laboratories requires special attention to safety procedures
In a tall organisational structure many levels separate the lowest positions from the highest one.
Hierarchical structures are taken to the extreme in organisations like the army. There are lots of different ranks or grades of workers, with different responsibilities, pay and status. Such organisations are meant to be more inflexible and bureaucratic.
2. Informal and Formal Organisational Structures
Organisational structure can be viewed from many perspectives, but I find viewing it from a decision making perspective most useful.
Structure exists to perform two essential functions within an organisation:
- Control - Ensuring that decision makers at all levels use the managerial or hierarchical constraint as one of the criteria in making their decisions, and
- Coordination - Ensuring that decision makers at all levels use lateral or peer constraints as criteria in their decision making
The informal organisation structure usually consists of staff and workers who report directly to a small number of managers. This permits a strong influence on morale, motivation and how satisfied staff are with their jobs. This can assist in giving a fast response to customers and following up market opportunities quickly but can lead to confusion of responsibilities and confuse decision making. Organisational growth could lead to increased tension due to overlapping of job roles which would lead to the organisation adopting a formal organisational structure.
The informal organisation is:
- Flexible and loosely structured
- Relationships may be left undefined
- Membership is spontaneous and with varying degrees of involvement.
The informal organisation can serve a number of important functions:
- It provides satisfaction of members' social needs, and a sense of personal identity and belonging
- It provides for additional channels of communication; for example, through the 'grapevine' information of importance to particular members is communicated quickly
- It provides a means of motivation, for example, through status, social interaction, variety in routine or tedious jobs, and informal methods of work.
- It provides a feeling of stability and security, and through informal 'norms' of behaviour can exercise a form of control over members
- It provides a means of highlighting deficiencies or weaknesses in the formal organisation, for example, areas of duties or responsibilities not covered in job descriptions or outdated systems and procedures. The informal organisation may also be used when formal methods would take too long, or not be appropriate, to deal with an unusual or unforeseen situation
The informal organisation, therefore, has an important influence on the morale, motivation, job satisfaction and performance of staff. It can provide members with greater opportunity to use their initiative and creativity in both personal and organisational development.
The informal organisation is the networks of relationships that employees form across functions and divisions to accomplish tasks fast.
Control is also an integral part of the process of management and a key element for any organisation, playing an important role in the relationship between managers and their subordinates.
Control is not only a function of the formal organisation and hierarchical structure of authority, it is also a feature of organisational behaviour and a function of interpersonal influence. The whole purpose of managerial control is the improvement in performance at both the individual and organisational level.
Control involves the planning and organisation of work functions, and guiding and regulating the activities of staff. A social organisation is an ordered arrangement of individual human interactions. Control processes help circumscribe typical behaviours and keep them conformant to the rational plan of the organisation.
Organisations require a certain amount of conformity as well as the integration of diverse activities. It is the function of control to bring about conformance to organisational requirement and achievement of the ultimate purposes of the organisation.
At the organisational level, management need to exercise 'control' over the behaviour and actions of staff in order to ensure a satisfactory level of performance. Managerial control systems are a means of checking progress to determine whether the objectives of the organisation are being achieved. Control provides a check on the execution of work and on the success or failure of the operations of organisations.
There are two main types of control which can be used within the organisation and whichever one of these two styles is chosen plays an important factor in the relationship between the manager and his/her subordinates. Firstly, there is 'Behavioural Control' which is based upon the direct personal supervision of the employees. This form of control appears more useful to the needs of individual managers in their attempts to control subordinates in one department or section.
There is also 'Output Control' which is based on the measurement of outputs and the results achieved. This form of control serves the needs of the organisation as a whole and is used largely because of the demand for simple measurement of organisational performance.
There are five essential elements for a management control system to be truly successful. These factors include the planning of what is desired, establishing standards of performance, monitoring actual performance, comparing actual achievement against the planned target and also rectifying the taking of corrective action.
Control is viewed as an essential feature of formal organisation and a hierarchical structure of authority. An alternative view of control is more in keeping with the human relations approach, control is seen as a feature of interpersonal influence and takes place within a network of interaction and communication. While the need for some form of control is constant, the extent and manner of control is variable.
In the formal organisational structure there will be patterns of communication and procedures for decision making. Some organisations will have tall structures with lots of layers of command. Other organisations can be relatively flat.
The formal structure is usually the first structure adopted after the simple informal organisational structure. It represents a significant shift from centralisation (one person in charge) to decentralisation.
Management is divided into tasks of getting the work (sales & marketing), carrying out the work (operations), getting the staff (personnel) and recording transactions and arranging finance (finance).
This can lead to tension and inter-rivalry between functions, overlap, duplication of effort and difficulties in co-ordination can also occur.
Formal structures are often based on specific tasks and it is how these tasks are allocated and the authority which they carry are explained by the organisational structure.
The formal organisation is based on official links and connections whereas the informal organisation is based on loose ad hoc connections. It is much easier to set out an organisation chart for formal structure than for informal ones, which may not be obvious and may change although some informal structures are deeply embedded in working practice.
The formal organisation is:
- Deliberately planned and created
- Concerned with the co-ordination of activities
- Hierarchically structured with stated objectives, the specification of tasks, and defined relationships of authority and responsibility.
Within the formal organisation an informal organisation will always be present.
I would define an organisations structure as the architecture both visible and invisible which connects and weaves together all aspects of the organisations activities so that it functions in a dynamic way. One simple approach is to consider how an organisations structure is described when represented in the form of a diagram which is most often shown as an organisation chart.
Below is an example of formal organisation chart for
- Organisational Structure of Scottish Enterprise Borders
- Scottish Enterprise operates a formal organisational structure subdivided into regional structures for each Local Enterprise company.
This structure is due to the organisation being relatively large, geographically dispersed, and delivering a wide range of goods/services. This is in common with all 12 local enterprise companies and allows us to work in close proximity to our customers and partners, by locating staff throughout lowland Scotland.
The regional structuring was adopted following a process the Scottish Enterprise Network went through 2 years ago called Business Transformation. This entailed a radical overhaul of the way Scottish Enterprise conducted its business. As part of Business Transformation the organisational structure of the entire Scottish Enterprise Network was reviewed and as a result a flatter less bureaucratic structure developed. The original structure hindered the decision making process and there was a lack of co-ordination. The network needed to modernise its working practices to ensure that it was giving tax payers value for money.
- It was considered that adopting this type of structure would improve decision making, fix
accountability for performance and increase the coordination of functions. This structure allows the network to evaluate and monitor its activities, it also allows a degree of flexibility.
The main downside of this strategy is that it does foster rivalry among the divisions. This is why our organisational values became an integral part of how we do business. Rivalry between local enterprise companies and departments is a cultural and historical issue that will probably always exist.
In Network terms, our business units are the 12 LEC’s and the directorates in Atlantic Quay. Every business unit owns a balanced scorecard to help them manage the performance of their own business unit. The reference point for this is the Network balanced scorecard agreed with the Corporate Management Team.
Strategy maps articulate the key objectives that describe both what the organisation wants to achieve and how it is going to achieve it, and demonstrates the critical cause and effect relationships between these objectives (i.e. linkages between desired outcomes and what we must have in place internally to deliver them). Strategy maps are now considered to be the single most important and useful element of designing a balanced scorecard.
- Organisational Chart
- The organisational structure of a business is most easily summarised in an organisational chart. The chart shows at any given moment in time how work is divided and the grouping together of activities, the levels of authority and formal organisational relationships. Organisation charts describe in diagrammatic form the structure of an organisation. It is the skeleton upon which every other activity depends, more importantly, it is the framework which explains the communication pattern, process and the linking mechanisms between the roles. It illustrates to everyone who communicates with whom, how the control system works, who is in control, who has authority and above all, who is responsible. It explains how the organisation is co-ordinated and how individual departments relate.
The division of labour and the relationship of one position to another is reflected in an organisational chart which can act as a guide to explain how the work of different people in the organisation is co-ordinated and integrated.
Once specified and defined, the jobs and the authority and responsibility relations between them are represented on an organisational chart.
Some charts are very sketchy and give only a minimal amount of information whilst others give varying amounts of additional details, such as an indication of the broad nature of duties and responsibilities of the various units. Others include names of post holders and even photographs, and some give the salary grading for individual positions.
Using such a chart would allow employees to become familiar with the organisation, making them feel a part of the company, allowing them to know who's who and what's going on.
Organisational charts are useful in explaining the outline structure of the company. They may be used as a basis for the analysis and review of structure, for training and management succession, and for formulating changes.
The chart indicates several important details about the organisation: -
- Lines of communication
- Delegation of authority
- Accountability
- Span of Control
- The way in which the work of the organisation is grouped
Organisational charts have several weaknesses as a means of explaining organisational structure. Most importantly, they may not be consistent with reality. They may not be current. They may imply a formality that does not exist in practice. Often, they are drawn from a top down perspective. The organisation may look quite different from the bottom than from the top. They often imply that a pyramid structure is the best or only way to organise a business. A circular organisational approach or team approach may in fact be better in some cases.
The organisation chart may fail to come to come to grips with the power and authority of a popular and charismatic person relatively low in the organisation or a person who has a substantial financial investment in the business without being a formal part of the management team.
Hierarchy refers to the number of levels found in an organisation. In a company that has a flat organisation structure there are relatively few levels between the lowest and highest levels of authority.
The basic distinction made between tall hierarchical organisations, and flatter teamwork structured organisations is that a tall organisation will have several layers of command.
In contrast team structures will be based on cells of team members working together, often belonging to several project teams which form and reform as projects start and finish.
The line relationship authority flows vertically down through the structure, for example, from the chief executive to director, director to team. There is a direct relationship between superior and subordinate, with each subordinate responsible to only one person. Line relationships are associated with functional or departmental divisions of work and organisational control. Directors have authority and responsibility for all matters and activities within their own directorate.
Lateral Relationships exist between team members. The organisation is not concerned with responsibilities or authority but rather with providing an avenue for communication and co-ordination between widely different aspects of work.
The lateral relationships that exist may be categorised into:
Colleague Relations: These are the relationship that exists between people working in the same directorate and who are members of the same team.
Collateral Relations: These are the relationships that are necessary for the interchange of ideas and opinions between people at the same level but in different teams within the organisation.
- Organisational Structure
Matrix Structure
Matrix structures are organisational forms which have evolved as a result of co-ordination problems in highly complex industries such as software development, where functional and product types of structure have not been able to meet organisational demands for a variety of key activities and relationships arising from the required work processes.
A matrix structure usually combines a functional form of structure with a project-based structure. For example, in a two year project to produce a modified version of a standard software programme, one project manager will co-ordinate, and be held accountable for, the work to be undertaken by the project team, and he will be the person who deals on a regular basis with the client. However, in addition to reporting to his own senior line manager on progress with the project as a whole, he will also report on specialist matters, such as design issues, to one or more functional managers, depending on the complexity of the project.
The functional managers provide technical expertise and organisational stability. The project manager provides the driving force and the day-to-day control required to steer the project through during its relatively temporary lifetime.
The main feature of a matrix structure is that it combines lateral with vertical lines of communication and authority. This has the important advantage of combining the relative stability and efficiency of a hierarchical structure with the flexibility and informality of an organic form of structure.
A matrix form focuses on the requirements of the project group, which is in direct contact with the client. It helps to clarify who is responsible for the success of the project. It encourages functional managers to understand their contributory role of the purely functional form, i.e. individual empire building by the functional heads.
Three conditions are necessary for the matrix:
- Economy of scale in the use of internal resources
- Environmental pressure for two or more critical factors such as product (need to complete a specific project--for example development of the Lower Churchill Falls for electricity) and function (specialized work activity skills needed from within the functional structure necessary for completing this project)
- Environment is both complex and uncertain
Key Matrix Roles
The matrix relies on three key roles:
Top leader - This individual must keep a balance between the two authority structures. The leader attempts to achieve a balanced matrix structure. Oftentimes either a functional matrix (primary boss functional leader) or product matrix (primary boss functional leader).
Matrix bosses - Individuals who have management responsibility within the functional and divisional structure need to work collaboratively and establish "a priori" arrangements for decision making and dispute resolution.
Two-boss employee - These individuals are the employees who perform the essential work and they report to two bosses requiring them to be able to deal with conflicting demands.
Strengths and Weaknesses
- Achieves coordination necessary to meet dual demands from divisional-product and functional requirements, but dual authority can be frustrating and confusing to employees.
- Provides flexible use of human resources across divisions-products, but participants need excellent interpersonal skills for work to proceed smoothly and successfully
- Suited to environment in which frequent changes occur, but consensus seeking and meetings are time-consuming
- Provides an opportunity for employees to acquire in-depth skill development for both functional and division-product skill development.
- Suited best in medium-sized organizations with several products or projects
However, like all organisational form, matrix structures do have their disadvantages. The most important are:
- The potential conflicts that can arise concerning the allocation of resources and the division of authority as between project groups and functional specialists
- The relative dilution of functional management responsibilities throughout the organisation
- The possibility of divided loyalties on the part of members of project teams in relation to their own manager and their functional superiors
Despite these disadvantages, the matrix form probably offers the best answer to date to the issue of handling the tension between the need to differentiate and the need to integrate the complex activities of modern organisations.
Hybrid Structure
Hybrid structures occur when an organisation adopts a structure, which combines two structures from either functional, product or customer principles as a basis for its design.
Most organisations eventually use multiple forms of structure within a single overall structure.
Once work groups have been departmentalised, the organisation needs to develop a network of reporting relationships.
A hierarchy is the pattern of reporting relationships between individuals in positions throughout an organisation. The hierarchy has two purposes; to specify which positions are responsible for which areas of operation and to specify the authority of different positions relative to one another.
Authority is the power created and granted by the organisation. Organisations must decide how authority is to be distributed among various positions, levels and departments.
The process of distributing authority between managers and subordinates is known as delegation.
Delegation is a three step process between a manager and one or more subordinates.
1) Assigning responsibility
2) Granting authority
3) Creating accountability
Many managers are reluctant to delegate because they don’t know how to do so or they feel threatened by a subordinate who performs well. Organisations need to help managers decide how much responsibility to delegate and to overcome the threat of being overshadowed.
Decisions about how to distribute authority throughout an organisation result in decentralisation or centralisation.
Delegation is essentially a power-sharing process in which individual managers transfer part of their legitimate authority to subordinates/team leaders, but without passing on their own ultimate responsibility for the completion of the overall task which has been entrusted to them by their own superiors.
Strengths and Weaknesses
- The hybrid is a balance between a pure divisional or product structure and a pure functional structure and combines the advantages of each.
- Weaknesses include high administrative costs and potential conflict over goal focus and resource allocations for functional and divisional departments.
The reasons for delegation are mainly practical, but some are idealistic. Practical reasons include:
- Senior managers can be relieved of less important, or less immediate, responsibilities in order to concentrate on more important duties
- Delegation enables decisions to be taken nearer to the point of impact, and without the delays caused by frequent reference upwards
- Delegation gives managers the opportunity to experience decision making and the consequences of their decisions
- Delegation encourages managers to learn how to cope with responsibility
- Delegation enables organisations to meet changing conditions more flexibly, especially at the boundaries of their system
Idealistic reasons for delegation include:
- Delegation is a good thing for individual growth, and contributes to staff morale
- Delegation is ‘the sine qua non of empowerment’ (Peter, 1988)
- Delegation helps to enrich individuals’ jobs and humanises work.
Most organisations find the need to delegate forced on them by circumstances, especially the pressures on managers to concentrate on environmental issues rather than on internal problems.
Overall, organisations have to adapt and grow whilst responding to environment and technology changes by developing more complex structures that are composites of the basic types.
Both Hybrid and Matrix structures are composites of the basic type of organisation structure.
The reasons why organisations divide into different structures is varied. Typically, structures develop out of functional lines (production, sales etc); geography (like Coca Cola); or by business.
The reason will be about capitalising on some structural efficiencies or economies of scale to produce competitive advantage. The benefits are that the smaller (hopefully more logical) units will be more manageable, efficient and profitable. Perhaps being closer to their market and more adaptable. Possibly maximising on internal communications and transfer of knowledge.
The consequences are (hopefully) that the benefits are realised.
However, the best practice is to be found in organisations that use delegation positively as an important employee motivator as well as a means of facilitating effective decision-making throughout the organisation.
